The leading tracking stent company has bottomed out and profits have risen sharply: the company has been deeply involved in photovoltaic stents for more than ten years. According to Wood Mackenzie, the company ranked fifth in the world with a market share of 9% in 2023. Affected by PV installations falling short of expectations in 2021 and rising steel and shipping prices, the company's performance briefly bottomed out. The industry picked up in 2022, and the company's shipments and profits continued to rise.

The company expects a targeted increase of 1.131 billion yuan to expand photovoltaic stent production capacity: the company went public in 2020 to raise 1.307 billion yuan in capital, mainly for the expansion of photovoltaic stent production capacity, the construction of India's Jash New Energy Private Co., Ltd., and the construction of R&D centers. In 2022, the company plans to issue a targeted increase of 1.131 billion yuan in capital for three PV bracket production expansion projects. As of September 7, 2024, the issuance has been approved by the Securities Regulatory Commission.

The economy of the tracking stand is outstanding, and the penetration rate is rapidly improving: Compared with fixed brackets, flat uniaxial tracking brackets can bring about 9.7% annual power generation gain, and as the price of upstream raw materials decreases, the cost side of the tracking stand improves, and the economy is outstanding. The US market continued to grow in 2023, and emerging markets showed significant strength. According to WoodMackenzie, total tracking bracket shipments reached 92 GW in 2023, an increase of 26% over the previous year.

Orders from emerging markets are growing rapidly, building a global supply chain and continuously expanding competitive advantage: the company is deeply involved in the Asian, African and Latin American markets such as India and the Middle East, becoming the leading supplier of tracking brackets in India, and achieving differentiated competition with established companies. Benefiting from the rapid development of ground-based power plant installations in emerging markets in recent years, the company's order volume has increased rapidly. 1H2024's new orders in India and the Middle East have reached 6.6 and 3.4 GW. Among them, India's new orders have already exceeded the number of new orders signed in 2023. As of 1H2024, the Middle East Africa and India together accounted for more than 85% of the company's current orders, with remarkable overseas results. At the same time, the company built three overseas production bases in India, Saudi Arabia and Brazil, continuously improving delivery capacity and service efficiency, and consolidating and expanding its original advantages.

Investment advice: We expect the company to achieve operating income of 8.69, 10.95, 13.24 billion yuan, and net profit to mother of 0.684, 0.897, and 1.099 billion yuan in 2024-2026. The corresponding PE is 18.97, 14.47, and 11.81, respectively. It is covered for the first time, giving it an “increase in holdings” rating.

Risk warning: downstream installed capacity falls short of expectations; rising raw material prices; increased industry competition; risk of exchange rate changes; risk of lifting the ban on restricted stocks; risk of trade friction.